programs to promote and achieve water conseVflsh customers a rebate for the inst

Question

programs to promote and achieve water conseVflsh customers a rebate for the installation ultralow an average of $60 per household. program household per month upervisor of a local water utility that is considering U e water conservation. Program A involves providing of an ultralow-flush tolet, which is expected to cost This program is expected to save customers $1.50 per householdeor s60 per houseat olves providing customers a rebate to replace their lawns with more drought irrigation system irrigation controller( etation coupled with the installation of a new irrigation system. The new ncludes a more efficient drip system controlled by a weather-based WBIC) which continually adjusts the amount of water the plants receive ased on their actual needs by taking into account site conditions such as temperature and brecipitation. Program B would cost an average of $550 per household. The expected saving of this program is estimated at $11.50 per household per month. Program C involves a targeted public information campaign to educate and inform customers on ways they can conserve water. The program is expected to cost $800 per household and the expected savings is anticipated to be $13 per household per month. Which program, if any, should be chosen by the utility If the study period is 5 years and the taract rate is 6% . a? Use the incremental B/C method and drawthe cash flow diagrams.

Explanation / Answer

Let us observe the three programs -

Program A - Cost 60 $

Saving(Or in other words Earning) per household - 1.5 $ / month

For a period of 5 years total saving = (1.5 × 12 × 5)

= 90 $

Percentage Profit per household = {(90-60)÷60} × 100 = 50%

Program B - Cost 550 $

Saving per household = 11.5 $/ month

For a per of 5 years total saving = (11.5 × 12 × 5)

. = 690 $

Percentage profit per household ={(690- 550) ÷ 550}× 100 = 25%

Program C - Cost 800 $

Saving per household = 13 $ / month

For a period for 5 years total saving = (13 × 12 × 5) = 780$

Here we can see that a loss has occured

Therefore Percentage loss = {(780-800)÷800}× 100

. = -2.5 %

Hence we can see that Program A gives the maximum profit % that is 50 % , hence it should be practised.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.